📚 Legal Learning – Share Trading & Portfolio Services Not Covered Under Consumer Protection Act
🔍 Key Takeaways:
🔹 Commercial Nature of Services
Trading in shares and portfolio management are considered commercial activities aimed at profit-making. Therefore, such services do not qualify as ‘consumer services’ under Section 2(1)(d) of the Consumer Protection Act, 1986.
🔹 No Consumer Dispute in Investment for Profit
An individual investing funds for trading in the stock market with an expectation of returns cannot claim to be a ‘consumer’, even if there is an allegation of non-performance or breach by the broker.
🔹 Appropriate Legal Remedy Lies Elsewhere
Disputes related to such commercial investments, including issues of unpaid amounts or mismanagement, must be addressed through civil suits or arbitration as applicable – not through consumer forums.
🔹 Time-Barred Complaints Not Entertained
Consumer complaints must be filed within the limitation period of two years from the date of cause of action. Delay must be justified with sufficient cause. Otherwise, the complaint will be dismissed as time-barred.
🔹 Reference to Prior Judgments
Consumer commissions have consistently held in multiple judgments that share trading, stock broking, and portfolio management services fall outside the scope of the Consumer Protection Act. Relevant precedents reaffirm this interpretation.
📝 Practical Insight:
If you're investing in shares, mutual funds, or any profit-oriented service, be aware that disputes may not be maintainable before consumer forums. Carefully review your agreements and seek civil or arbitration remedies in case of breach.
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